OP
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Thread Starter
- Thread starter
- Banned
- #16
Fly,
I don’t think I said anything about picking apart any airline. The reason why a DL acquisition of UA is more likely to succeed than the often touted AA acquisition of UA’s Pacific routes is because DL can acquire more of UA than any other airline because of its relatively small overlap.
Delta is no longer the company that was on the verge of bankruptcy. Grinstein’s doom and gloom talk worked to extract a significant part, but not all of the concessions he wanted. Yes, the legacy segment of the industry, including Delta, continues to be mired in a deep financial crisis. However, everyone recognizes that the industry cannot survive as it exists now. As I’ve pointed out, I believe DL will have a hard time reaching its financial goals with its existing network and fleet. I’ve also pointed out that DL has a considerable amount of underlying wealth in its regional jet and efficient maintenance operations that other carriers simply don’t have in addition to its unmortgaged assets – something CO has none of. I also have suggested that consolidation in the industry could be facilitated by outside investors, a recognition of the fragile financial position the legacy carriers find themselves in.
If US fails, DL’s finances sure will improve an aweful lot. A US failure sure seems a lot more likely based on what I read on the US board. A US failure also hurts UA based not only on the lost revenue from the codeshare but also because of the hole left in UA’s network on the east coast. I don’t realistically expect DL to make any strategic moves as long as US is still around but if they fail and if DL is able to limit the competitive influx into DL’s key SE markets, moving forward strategically will begin to look a lot more likely.
Unlike US, UA still has considerable value based on its industry leading access to world and domestic markets. Instead of letting UA continue to erode, it makes a lot more sense to buy UA while it is still close to its pinnacle than for service to begin faltering to the point that the customer base is lost.
Fly, you may recall that early in your career DL acquired Western in its entirety and shortly thereafter acquired Pan Am’s transatlantic assets including a significant number of its employees. DL has a history of integrating airlines it has acquired much better than AA. The Western acquisition was considered one of the best while DL paid a high price for failing to recognize that things weren’t working as planned in the PA acquisition. I would bet that the only regrets DL has about he Pan Am acquisition is that they didn’t move earlier in order to get LHR access and that they didn’t more aggressively manage the acquisition in order to make Pan Am work for them sooner. You may also recall that DL’s acquisition of Pan Am came just months after Eastern’s demise. Strengthened domestic finances enabled DL to go shopping for new international routes.
Unless UA can pull together a viable business plan in the next couple of months, UA’s creditors AND employees may be best served by an acquisition. Based on the new pay rates UA is “asking†from UA employees, they would get a pay raise if they were to go to work for DL. DL may or may not kick its flight attendants in the teeth but they continue to enjoy better pay and benefits than do employees at competing airlines – exactly the same strategy DL has used for years. Ultimately, the creditors want someone to pay the bills. There is no reason to think DL could not integrate UA’s operation into its own and take over its aircraft and associated debt; more of UA’s current network might be maintained than DL’s.
If you can get the pass card and a little cash, take it. You might find that your UA pass card in time will get traded in for a DL card.
I wish you well this Thanksgiving and always.
I don’t think I said anything about picking apart any airline. The reason why a DL acquisition of UA is more likely to succeed than the often touted AA acquisition of UA’s Pacific routes is because DL can acquire more of UA than any other airline because of its relatively small overlap.
Delta is no longer the company that was on the verge of bankruptcy. Grinstein’s doom and gloom talk worked to extract a significant part, but not all of the concessions he wanted. Yes, the legacy segment of the industry, including Delta, continues to be mired in a deep financial crisis. However, everyone recognizes that the industry cannot survive as it exists now. As I’ve pointed out, I believe DL will have a hard time reaching its financial goals with its existing network and fleet. I’ve also pointed out that DL has a considerable amount of underlying wealth in its regional jet and efficient maintenance operations that other carriers simply don’t have in addition to its unmortgaged assets – something CO has none of. I also have suggested that consolidation in the industry could be facilitated by outside investors, a recognition of the fragile financial position the legacy carriers find themselves in.
If US fails, DL’s finances sure will improve an aweful lot. A US failure sure seems a lot more likely based on what I read on the US board. A US failure also hurts UA based not only on the lost revenue from the codeshare but also because of the hole left in UA’s network on the east coast. I don’t realistically expect DL to make any strategic moves as long as US is still around but if they fail and if DL is able to limit the competitive influx into DL’s key SE markets, moving forward strategically will begin to look a lot more likely.
Unlike US, UA still has considerable value based on its industry leading access to world and domestic markets. Instead of letting UA continue to erode, it makes a lot more sense to buy UA while it is still close to its pinnacle than for service to begin faltering to the point that the customer base is lost.
Fly, you may recall that early in your career DL acquired Western in its entirety and shortly thereafter acquired Pan Am’s transatlantic assets including a significant number of its employees. DL has a history of integrating airlines it has acquired much better than AA. The Western acquisition was considered one of the best while DL paid a high price for failing to recognize that things weren’t working as planned in the PA acquisition. I would bet that the only regrets DL has about he Pan Am acquisition is that they didn’t move earlier in order to get LHR access and that they didn’t more aggressively manage the acquisition in order to make Pan Am work for them sooner. You may also recall that DL’s acquisition of Pan Am came just months after Eastern’s demise. Strengthened domestic finances enabled DL to go shopping for new international routes.
Unless UA can pull together a viable business plan in the next couple of months, UA’s creditors AND employees may be best served by an acquisition. Based on the new pay rates UA is “asking†from UA employees, they would get a pay raise if they were to go to work for DL. DL may or may not kick its flight attendants in the teeth but they continue to enjoy better pay and benefits than do employees at competing airlines – exactly the same strategy DL has used for years. Ultimately, the creditors want someone to pay the bills. There is no reason to think DL could not integrate UA’s operation into its own and take over its aircraft and associated debt; more of UA’s current network might be maintained than DL’s.
If you can get the pass card and a little cash, take it. You might find that your UA pass card in time will get traded in for a DL card.
I wish you well this Thanksgiving and always.
